New Delhi: Union Finance Minister Nirmala Sitharaman presented the Economic Survey 2024-25 in Parliament, projecting India’s real GDP growth at 6.4% for FY25, aligning with its decadal average. The survey highlighted geopolitical risks, trade challenges, and inflation moderation, while emphasizing infrastructure expansion and economic deregulation as key drivers of long-term growth.
Economic growth and inflation trends
India’s real Gross Value Added (GVA) is estimated to grow at 6.4% in FY25. The survey projected real GDP growth for FY26 in the range of 6.3% to 6.8%, factoring in global and domestic uncertainties.
Retail inflation eased to 4.9% in April-December 2024, compared to 5.4% in FY24. The survey cited global economic slowdowns, geopolitical tensions, and trade policy risks as key challenges for growth.
Capital expenditure and trade performance
The survey reported an 8.2% year-on-year growth in capital expenditure (CAPEX) between July and November 2024. India’s non-petroleum, non-gems, and jewellery exports increased by 9.1% in April-December 2024, reflecting resilience in merchandise trade.
India accounted for 7th largest share in global services exports, with the services sector growing by 11.6% year-on-year in the first nine months of FY25.
Banking and financial sector
The survey reported a decline in gross non-performing assets (GNPAs) of scheduled commercial banks to a 12-year low of 2.6% as of September 2024. Bank credit growth outpaced nominal GDP for two consecutive years, narrowing the credit-GDP gap to (-)0.3% in Q1 FY25 from (-)10.3% in Q1 FY23.
Under the Insolvency and Bankruptcy Code, ₹3.6 lakh crore was realized from 1,068 resolution plans by September 2024, amounting to 161% of liquidation value and 86.1% of the fair value of assets.
Stock markets and investment mobilization
The BSE market capitalization-to-GDP ratio reached 136% by December 2024, surpassing China’s 65% and Brazil’s 37%. Resource mobilization from primary markets (equity and debt) stood at ₹11.1 lakh crore between April and December 2024, 5% higher than FY24.
The insurance market grew by 7.7% in FY24, with total premiums reaching ₹11.2 lakh crore. India’s pension sector expanded by 16% year-on-year as of September 2024.
External sector and FDI trends
India’s overall exports (merchandise + services) grew by 6% year-on-year in the first nine months of FY25. The services sector exports rose by 11.6%, and India ranked second in global exports of telecommunications, computer, and information services, commanding a 10.2% market share.
The current account deficit (CAD) stood at 1.2% of GDP in Q2 FY25, supported by rising net services receipts and higher private transfer inflows.
Gross FDI inflows increased 17.9% year-on-year to $55.6 billion between April and November 2024, up from $47.2 billion in the same period of FY24. Forex reserves stood at $640.3 billion by December 2024, covering 10.9 months of imports and 90% of India’s external debt.
Infrastructure, digital expansion, and energy growth
Public infrastructure spending remained a priority, with government capital expenditure growing 38.8% between FY20 and FY24.
- Railways: 2,031 km of new railway network commissioned between April and November 2024, and 17 new Vande Bharat trains introduced between April and October.
- Roads: 5,853 km of National Highways constructed in FY25 (April-December).
- Ports: Container turnaround time reduced from 48.1 hours in FY24 to 30.4 hours in FY25 (April-November).
Renewable energy capacity increased by 15.8% year-on-year, with renewables now accounting for 47% of total installed capacity. 18,374 villages were electrified, and 2.9 crore households received electricity access under DDUGJY and SAUBHAGYA.
The rollout of 5G services across all states and UTs was completed by October 2024, while 10,700 villages received 4G connectivity under the Digital Bharat Nidhi by December 2024.
Under Jal Jeevan Mission, 12 crore families received piped drinking water, and 1.92 lakh villages were declared ODF Plus under Swachh Bharat Mission-Grameen Phase II.
Industrial and services sector growth
The industrial sector is projected to grow at 6.2% in FY25, driven by electricity and construction. Automobile domestic sales grew by 12.5%, and domestic electronic goods production expanded at a 17.5% CAGR from FY15 to FY24.
The pharmaceutical sector’s turnover reached ₹4.17 lakh crore in FY24, growing at an average rate of 10.1% over five years. India ranked 6th globally in patent filings, as per the WIPO Report 2022.
India’s MSME sector remained a key economic driver, with ₹50,000 crore Self-Reliant India Fund supporting scalable enterprises.
The services sector accounted for 55.3% of total GVA in FY25, up from 50.6% in FY14. Services exports grew 12.8% in April-November FY25, compared to 5.7% in FY24.
Tourism returned to pre-pandemic levels, contributing 5% to GDP in FY23, while Indian Railways recorded 8% growth in passenger traffic and 5.2% growth in revenue-earning freight.
Agriculture and food security
The agriculture sector contributed 16% to GDP in FY24, with horticulture, livestock, and fisheries driving growth. Kharif foodgrain production is projected at 1,647.05 lakh metric tonnes (LMT) in 2024, an increase of 89.37 LMT over the previous year.
Fisheries saw the highest growth with an 8.7% CAGR, followed by livestock at 8% CAGR. The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) was extended for five years, ensuring food security.
By October 2024, over 11 crore farmers benefited from PM-KISAN, while 23.61 lakh farmers were enrolled in PM-Kisan Mandhan.
Employment, AI, and skill development
The unemployment rate declined to 3.2% in 2023-24, down from 6.0% in 2017-18. The survey highlighted India’s demographic advantage, with 26% of its population aged 10-24 years, presenting long-term workforce potential.
Government initiatives to boost women’s entrepreneurship, expand digital economy jobs, and promote renewable energy employment were emphasized.
The report noted that Artificial Intelligence (AI) will reshape labor markets, particularly in healthcare, finance, and education. The survey emphasized “Augmented Intelligence,” where AI integrates with human skills to enhance productivity and workforce efficiency.
Policy and economic outlook
The Medium-Term Growth Outlook emphasized systematic deregulation to improve Ease of Doing Business and strengthen MSMEs. The report underscored geopolitical challenges, global trade shifts, and energy security concerns, urging India to leverage domestic resources, infrastructure, and innovation to maintain its growth momentum.
The survey stated that India must achieve 8% GDP growth for the next two decades to realize Viksit Bharat 2047 and called for higher investments in infrastructure, manufacturing, and technology to sustain long-term economic expansion.
